MBS RECAP: Sudden Glut of Fed Bond-Buying Comments


Posted To: MBS Commentary

As recently as January 10th, Jerome Powell unequivocally stated that the Fed's balance sheet wind-down was on auto pilot. In other words, they weren't going to be jumping back into buying bonds with balance sheet reinvestments any time soon. Now in the wake of the January 30th Fed statement, rehashing the balance sheet plan is all the rage. Today's line-up of speakers put an exclamation point on the topic with most of them clearly communicating a near-term end to the balance sheet run-off. In other words, there's a 2019 scenario (and a likely one, to hear them say it) where the Fed could begin buying bonds again. Keep in mind this isn't bond-buying in the QE sense. The Fed wouldn't be printing money or adding to its balance sheet. Rather, we're just talking about…(read more)

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